Category: Business

Read Adedeji Olowe’s take on business, business models, and other transformational topics about business in Nigeria, Africa, and the world.

The Rise of Killer Smartphones

It seems Nigerians, like most Americans, are missing out on an interesting revolution happening out there in the smart phone universe. But then, if you stood on a rail track with your Beats headphones on and oblivious of the rushing train, does it make you safer? Or maybe an ostrich, with its head planted in the sand and nice rump in the air, wouldn’t know that it’s about to get bitch slapped.

That was a digression. It seems I can’t keep a conversation without drawing a wonky line.

I remember vividly how Blackberry sneaked on Nokia and ate its breakfast. Then Android + Samsung ate Blackberry’s lunch. Seems Samsung is going to be hungry tonight because two bad ass boys are around the corner, but the demolition promised would upend everything.

Quite a number of smart phone makers are all over the world with most around the middle kingdom but the cachet that Samsung and Apple have over everyone has been selling high-end phones: powerful chipsets, stunning graphics and expensive clothing. Of course, the price of this phone can buy about a third of a Tata Nano.

Here comes in Xiaomi. A recent entrant into the smart phone arena and in a few months have rocketed to number 3, sniffing annoyingly at Samsung backside. It’s on track to sell 100M smart phones in 2015. What’s the trick? High-end phones at knockoff prices. What’s their game? They want to take over the world, that is, do bloodletting with Samsung then come back and earn some money.

You wonder if a business can survive without earning a decent profit? Yes. Amazon!

So far it seems to be working and investors are pouring in more cash than Hurricane Katrina.

This would have been perfectly OK if another Chinese ain’t doing same. OnePlus is just a year old as a company and wants to push out about 5 million phones this year at cutthroat prices but with hope to make money on services.

Of course, the gloomy pictures I just painted is for the like of Samsung to brood over. As far as consumers are concerned, they could slug each other to death.

By the way, when are we getting a mobile phone with 8GB RAM and 48 hours battery?

The strong also fail and it’s no big deal

Sometimes you just need to know when to call it quits. Does that make you a loser? Hell no! Or maybe. You can’t be sure until it’s all over.

The way it is, the most important thing is to win the war but you may lose some battles or side street skirmishes in the interest of overall success of your military or career campaign.

Some stories come to mind – Apple dropping Ping, a social network (I wonder if any of you know about it) like a bad habit when it wasn’t going north. Microsoft quarantined Nokia like a virus and took a $7.6B haircut while at it.

Recently, the folks at Google had a serious heart-to-heart talk with each other and decided that Google+ should go the way of the dodo. Starting weeks ago, Google+ is getting kicked out of Google assets, inclusive of YouTube were forcing users to have a Google+ accounts has drawn backlash.

Which comes to a critical question – how do you know when to throw in the towel and declare the current adventure dead or push through and succeed? The world is replete with anecdotes of people who succeeded despite odds stacked against them. Same world is also replete with anecdotes of those who didn’t pull back on time.

Sometimes life feels like a coin toss with two heads or two tails. The luck isn’t in the spin, it’s in the pick.

Micro-lending, or lack of it, didn't kill Financial Inclusion

My recent rant on what’s making mincemeat out of financial inclusion in Nigeria generated quite a bit of talk within my little circle of friends. Some thought I must have mistakenly installed someone’s mind while looking for my lost one. A pitiful few others felt it made some sense, which is something that’s rarely said about me.

Along the line, I read somewhere that lack of micro-lending killed financial inclusion and that because there is easy credit in places like Kenya, financial inclusion bloomed.

I fell off my chair and almost cracked my skull. A tile broke instead (Agbari Ojukwu!).

I think it’s time we laid it out clearly for some of my fancy armchair consultants, financial inclusion + mobile money software purveyors and self-styled rich-do gooders.

Micro-lending and other types of consumer lending haven’t worked in Nigeria because if a bank ain’t sure money would come back home, she ain’t lending it. If you ever spent 2 minutes working in a bank, that’s the second thing you are gonna be taught. The first lesson? Always get to work on time!

For those who ever made a mistake of transferring money to wrong accounts, the lucky account holders always clean out before Bart Simpson could blink. Give a loan to someone without proper ID or means to punish, you will never see his dirty backside again.

Nigeria is a special country where only fools hand out kishi without a guarantee of getting them back. Bankers are not the smartest but not fools either.

Who doesn’t want to do micro-lending? Bankers can smell money better than sharks could smell blood. The margins are simply better; fewer concessions; shorter terms with more rollovers. I can smell heaven and bonuses! But without a means of scaring bejesus out of erring borrowers, when there’s need to do that, nobody’s gonna play dice.

Because of this, banks, CBN and hapless staff of the banks came together to do the BVN which is a biometric identification that’s unique across the financial estate in Nigeria. They want to ensure that even if you take money and skip from paying, you will be permanently locked out of banking until you pay back, do penance, both or just die (whichever comes earliest).

Some people have called this the sign of the beast and I think there is an element of truth in that. Calling it The Financial Beast would be more appropriate: It bites your backside when you misbehave, financially.

The Banks spent about $55M putting this contraption in place – if they weren’t serious about KYC and financial inclusion (really?) they wouldn’t have done it.
Which comes to the lack of ease of account opening because of KYC. Frankly it is a chicken and egg problem.

Accounts are very easy to open in most Nigerian banks as long as you have a passport photograph, barely legibly filled account opening form, a government ID and proof of address such as original utility bill – it doesn’t even have to be in your name. What else can we ask for?

But original ID is hard to come by and the average banker trust most IDs less than they trust New Year prediction by new age prophets. The ease at which you can invent an ID would make Photoshop software makers proud of themselves. Most IDs are non-verifiable which lead to the previously discussed BVN.

Does the BVN make a good man out of everyone? Maybe not but the punishment for lying is eternal damnation in the pit of financial exclusion. Too bad, you are probably stuck with your ten fingers and their wobbly prints unless you take some drastic actions.

So, some people will lie to get their BVN but how they will unlie when they need other documentations and accounts in the future, is something I’m sitting on my chair, sipping Pina Colada, waiting for.

I’m still rubbing my sore head.

What’s killing financial inclusion in Nigeria?

Financial inclusion in Nigeria falls short because products lack accessibility and affordability, ignoring basic needs like free transactions. Understanding the needs of the poor is key to an effective design.

No scholar worth his salt would denigrate his study in the first line, or on any other line for that matter. However, listen carefully, take what I’m going to say below with a pinch of salt as it’s based on armchair projections.

But then who cares?

We are quite a lot in Nigeria, or so says the official and derivative stats. I really don’t buy into the numbers but then nobody gives two flying horse legs about my opinions. With about 180 million hungry souls crammed within the national border, only about 30 million accounts are there in the 20+ odd banks.

Considering that nobody in Nigeria is faithful to anything, especially to their banks, I know finding unique bank customers could slash the numbers down to about 20M. Just a hunch, don’t quote this for your PhD!

The Central Bank of Nigeria, other NGOs and do-good money bags have tried all they could with financial inclusion but it ain’t just hitting that sweet spot. Banks were corralled into the deal, and we came up with Prepaid Cards and Mobile Wallets. Both had as much success as the Zepellin.

On a quiet Sunday morning, after the rain has done about 3 rounds, much more than middle-aged men can cope with these days, I thought about what could have made all the efforts, the bankers, the CBN, flounder like a pricked balloon.

It was just simple. Financial inclusion designed by rich bankers and their friends in Brioni suits just don’t work.

Why? Because financial inclusion products should be accessible and affordable. Unfortunately, they are not.

This is best underscored by a recent conversation I had with one of my banker friends designing a saving product where artisans and others can pay N100 a day to save about N1,000 using their phones. I was like, what the F? I wouldn’t even do that on a regular account!

Which brings us to why the fancy financial inclusion schemes never work. Most were designed with absolutely no idea of what poor people want. But then ain’t difficult to find out, they want basic and affordable financial products.

They want free cash in/cash out.

They want free balance inquiry.

They want free bill payments.

They really don’t give two rats’ legs about cost of transaction.

Oh my, they don’t keep money in balances because like we all know, you can only save when you can afford to. When you live off less than $1 a day, which 70% of us are anyway (who did the enumeration?) you can’t afford to save. When you earn less than N50K a month and you have mouths hungrier than young birds to feed, you can’t save.

So dear banker, if the poor can’t save, there isn’t going to be any float.

If you don’t get any of these above, you can’t design products for poor people, bottom of the pyramid or financial inclusion.

This isn’t Davos, so get off your high horse dude!

Laptop makers have no brains

Once upon a time each phone brand had its own charger type. But common sense prevailed, hastened by the European Union, and everyone agreed on USB starting first with mini then micro connector. For more on this story you can read here, here and here.

Apple has been a notable exception, but it has gazillion phones out there using only one type of connector.

But it seems the day the rain of common sense fell the laptop manufacturers had umbrellas. Different charger types, even along same product brand? It’s hell. It doesn’t make sense. It is stupid.

There is nothing technical about this after all almost all laptops in the world are made by just 5 companies – Quanta, Compal, Wistron, Inventec and Asus.  The last has since established its own brand. I use its excellent Asus RTN66R VPN Router in my lair.

There has been numerous talks and proposals to have all laptops share a common charger. A standard has been pushed aggressively by IEC but still a pipe dream. Wake me up when it happens.

Good night fellas.